[Stoves] REVISED Off-topic: Kirk Smith on India's LPG Programs: Globally Pioneering Initiatives

[Nikhil Desai]

Paul:

Below my comments on Prof. Kirk Smith's newest contribution to marketing my
prime minister. While I wholeheartedly agree with the LPG policy thrust, I
have my misgivings about Prof. Smith's politics. I have not yet read your
and Dr Karve's comments, and just wanted this piece out, most of it written
two days ago and skirts the issue of how to meet Prof. Smith's challenge on
solid biomass cookstoves. (I think that challenge should come from the
energy, agriculture and food, forestry and environment sectors, not public
health sector with incredible claims on deaths from PM2.5 concentrations
(which are not measured, nor their impacts measured, at scale and for long
enough durations.)

This is much too long, and rambles, hence my labeling it Off-topic.

My comments are in six parts, A to F; it is Section D that addresses
biomass stoves. Section A is critical of the basic premise in the title of
the chapter - Globally Pioneering Initiatives. Sections B and C are
critical of his health claims. Section E is about program costs and Section
F some comments about world LPG trade.

Questions welcome. This wasn't really meant for this List, but it's a draft
toward a longer essay.  I kept critiquing as I went along, and I will
prepare a longer version for folks interested in Indian energy policies and
politics. I touch upon some views of Prof. Smith and Ajay Pillarisetti in a
July 2017 piece "Comments on the National LPG Programmes of India". (It may
be on Prof. Smith's website.)

Nikhil


--------------------------------------------------
Kirk R. Smith, 2017, *The Indian LPG Programmes: Globally Pioneering
Initiatives*,
<https://static1.squarespace.com/static/53856e1ee4b00c6f1fc1f602/t/59cbccceb1ffb6ec72ff9653/1506528465646/Modi+book+chapter.pdf>
Chapter 5 in Bibek Debroy & Ashok Malik, eds, *India at 70; Modi at 3.5
<Modi at 3.5>*, Wisdom Tree, New Delhi, 211 pp.

++++++++

A. I doubt about "pioneering"; remains to be seen how many others follow or
whether even the Indian scheme survives a spike in oil prices.

A pioneer is someone who is the first or among the first, with others to
follow. India's LPG program is decades old, and now shifted toward the
lower middle class in cities and towns, large villages. The gadgetry of
stopping subsidy leaks via direct subsidy transfer rather than just price
controls (which too continue) is facilitated by electronic banking and the
spread of bank accounts.

Otherwise the basic idea is not new - back in 1990/1, in a paper for APDC
in Kuala Lumpur, Ramesh Bhatia and I had argued that kerosene should be
driven out of the rural lighting market and the urban cooking market, with
electricity and LPG taking place respectively, which meant expanding the
LPG reach to former kerosene users in cooking. That market has grown over
time. What we did not foresee - and which has made this rapid expansion
easier now - is that India has had a sustained growth spurt and new
residential construction, with millions of people graduating from cylinder
gas (LPG) to piped gas (PNG). PNG pricing is graduated - at least in some
markets - and does not require pre-payment as with cylinders.

So the most that can be said about this "globally pioneering initiatives"
is the my Chaiwala Prime Minister and Prof. Smith are good image-marketers.
India's context - and politics - permitted this and I doubt it can be taken
up on that scale by other countries that soon. (Many other countries have
LPG subsidy programs that have reached lower-income customers; oil
exporters are one group, and Brazil is another that comes to mind.)

Here are some rough estimates. As of mid-2017, India had some 110 million
LPG customers of whom about 10 million are not receiving cash subsidies.
Another 5 million who were earlier entitled to subsidized "connections" may
have stopped using LPG or were phantom accounts set up for selling in the
open market anyway. These practices go back 50 years and surely continue
now.

What Prof. Smith calls "pioneering" is probably this Ujjwala
<http://www.pmujjwalayojana.com/faq.html> (means "light" or "brightly lit")
program Modi launched to give 50 million women "Below Poverty Line" (there
are cards assigned to some households) new "connections" from the public
sector oil marketing companies with upfront cost 50% financed by the
government. That is budgeted at $1.2 billion over three years, over and
above the cost of subsidizing the fuel tank refill.

There was a more ambitious - if we are going to count the numbers - program
launched eight years ago - as described in the 2010-11 Economic Survey
<http://indiabudget.nic.in/es2010-11/echap-11.pdf>: " The RGGLVY (scheme)
for small-size LPG distribution agencies was launched on 16 October 2009.
This scheme  *targets coverage of 75 per cent of the population by 2015* by
release of 5.5 crore new LPG connections." (RGGLVY means Rajiv Gandhi
Gramin LPG Vitaran Yojana or Rajiv Gandhi Rural LPG Distribution Scheme.
Crore means 10 million. Nikhil)

Like Modi's scheme for BPL households, this earlier scheme also had "Free
LPG Connections to BPL Rural Households", with the GoI and the public
sector oil marketing companies covering the initial cost of a "connection".
It was budgeted at Rs 490 crores or some $100 million a year (at
then-current exchange rate).

Like any good politician, Modi changed the name and sold the country - and
Prof. Smith - on "globally pioneering initiatives". The earlier scheme
couldn't get implemented in a timely fashion in part because the electronic
payment of subsidies couldn't be expanded rapidly and Modi's own party
opposed it. We shall see about this one. What it does do is open up the
market for unsubsidized household customers - there are probably 5 million
commercial customers as well, who never received subsidized LPG - to
private oil companies, like Modi's friends the Ambani Reliance Group
<http://economictimes.indiatimes.com/industry/energy/oil-gas/reliance-industries-eyes-lpg-customers-who-have-surrendered-subsidy/articleshow/53626293.cms>.
As I note below, the government has declared it will eliminate the LPG fuel
subsidy by coming March-end.

Modi also has a $10 billion plan for 100% village electrification promised
in the 2016 budget speech
<http://indianexpress.com/article/business/budget/budget-2016-figures-arun-jaitley/>
by his finance minister - by March 2018. This includes "free grid
connection"  to 40 million BPL (Below Poverty Line) households, and
distribution tariffs in rural areas are highly subsidized. (Public sector
electricity distribution companies have huge accumulated losses and are
unable to lift power from the bulk power market - small as it is - with the
grotesque irony that India has been running a power surplus even as
millions of people don't have electricity.

This reference to electricity is germane in that like it or not, grid
electricity does make some dent in the woodfuels market - making beverages,
heating water, or using an induction stove, another favorite of mine as
well as Prof. Smith's - in households or as household outsource the kitchen
(commercial cooking).

Which does have the challenge for those who wish to serve some 50 million
households - or twice as many if they do prefer "stacking" once the LPG
subsidies are gone - to make new biomass stoves and fuels that can compete
commercially (marketed not just as "clean" but as modern - convenient,
safe, status symbols). Forget ISO Tier 4 hourly average emissions of PM2.5;
make stoves that can compete with LPG, and ask for support that matches the
oil companies' muscle and government bias against alternatives.

Now other details.

+++++++++++++++
B.

Prof. Smith says, "a typical chulha emits as much smoke in an hour as 400
cigarettes being burned in the kitchen." (chulha means stove in some parts
of India, though Prof. Smith takes it to mean only a solid fuel stove.
Nikhil)

*** There is no "typical" chulha with a "typical" fuel with a "typical"
cook, pot and cooking practices, and Prof. Smith has no basis for this
claim except by assumptions and extension of spotty, short-term
measurements of concentrations -- even rarer of emission rates specific to
the qualities and quantities of fuels, foods, cook's environments, and
operating practices. Besides, with his assumption of equitoxicity, he
needed only to adopt dose-response ratios for tobacco smoking with cancers,
COPD, CVD, or now maybe arthritis and childhood stunting without going
through the hassle of cooking up uniform concentration levels for all
households polled as using solid fuels as primary source of cooking energy.
(I don't know how he separates coal from biomass solids, and solid fuels
PM2.5 from other PM2.5, or instantaneous exposures linked to life-time
burden of disease and disability. Doesn't matter; when you have a
UC-Berkeley professorship, you can get away with murders by assumption and
saving lives by assumption.)

If all those household inhale as much smoke as 400 cigarettes on a daily
average basis, no need for fictitious Relative Risks from Integrated
Exposure Response with extrapolation between cigarette smoking to ambient
air pollution in the rich countries. Different time periods, different
population cohorts, lumped together indiscriminately; bodies are all
standard-issue from God's factory.

Prof. Smith does say, "Although not as risky per person as actually smoking
cigarettes";  that can mean anything he makes it up to mean. After all, he
does assume equitoxicity of PM2.5, but does not include anything other than
PM2.5 in his computations of HAP burden of disease. The last I checked
(Brown et al. 2013), there is no consensus that PM 2.5 is the only or even
the best metric for toxicity of biomass smoke. Equitoxicity is not credible
science, nor the IERs. ***

++++++++++++
C.

The next claim is "Based on hundreds of studies in the health literature,
many undertaken in South Asia, it now estimated by the World Health
Organization (WHO) and others that about 9 lakh (0.9 million - Nikhil)
premature deaths occur in India annually from chulha smoke."

*** As far as India goes, direct observational studies matching chulha
smoke to particular disease incidence pattern over a number of years (say,
five to ten years) are rare if not non-existent. By definition, none of
them observed and linked "premature deaths" occurring annually from chulha
smoke. Prof. Smith is only touting his own rigmarole in the IHME Global
Burden of Disease. The WHO GHE Burden of Disease seems to take the same
assumptions - curious at best, eminently challengeable - to cook up its
estimates for the world and for India. That is "murder by assumption."

He does not provide an estimate of how many premature deaths will be
averted by the use of LPG in Indian households, with or without "stacking".
I suppose that will take hundreds of studies contracted out to UC-Berkeley
and WHO.

I can probably take HAPIT and run some assumptions; won't, until someone
pays me my DALY at three times the US GDP per capita.

Suffice it to say there is no credible quantification of national, city, or
village disease reduction (frequency, severity) by household transition
from wood to charcoal or charcoal to LPG, with or without stacking, in
South Asia or Sub-Saharan Africa.

Nor is there any such quantification at the national level for the OECD
countries or some oil-exporting developing countries who transitioned from
household use of wood and coal to gas and electricity.

The under-5 mortality rate in India is estimated to have declined at an
average annual rate of about 4.7% from 2000 to 2016. (Lancet 16 September
2016). I wonder if Prof. Smith can come up with an attribution of this
cumulative 50+% decline in infant mortality to LPG use.

I am not convinced any such quantification can be generated for Indian
households from 2015, say, to 2030, though that is what is now required of
WHO - to provide national estimates of "Mortality rate attributed to
household and ambient air pollution
<https://sustainabledevelopment.un.org/SDG3>". This is "mortality rate",
not "premature mortality". Looks like a fabulous new opportunity for Prof.
Smith and his colleagues to cook up numbers for "attribution".

At any rate, Government of India would be hard-pressed to claim any
mortality attribution to LPG because SDG 3.9.1 is for combined Household
AND Ambient air pollution, neither of which is measured countrywide anyway.

Glad to see no claims for LPG reducing rates of rape, or of deforestation,
or gender inequity. I don't know why GACC is still fussing with its
Evidence Base report to DfID, draft due now.

Nor can I tell why TC-285 is borrowing WHO-imposed hourly average PM2.5
emission targets or there is any fuss over efficiency numbers. There is
really no link between solid fuel cooking and SDGs, GACC pronouncements
notwithstanding. ***

+++++++++++
D.

Prof. Smith's anti-poor bias is obvious in his comments on biomass stoves
(having suffered failure of his great enthusiasm some ten years ago for
"advanced biomass stoves" program in India, which went Up in Smoke.) He
says,

"None of this has, however, affected the budget of the renewable energy
ministry, which still runs the national biomass and biogas stove programs.
(sic)  These programmes should still be encouraged, but perhaps now better
focused on the very poorest and more remote populations that will not be
reached by LPG in the next decade. These people would still benefit from
more efficient stoves that at least lower pollution exposure to some
extent. Unfortunately, however, *no biomass stove on the market is nearly
as reliably clean as gas fuels and, thus, cannot be proposed yet as a
health measure if gas is available*."

*** I don't think Prof. Smith cares much for "these people" or appreciates
the barriers to marketing "more efficient stoves that at least lower
pollution exposure to some extent." It is not as if LPG stoves will
eliminate all pollution exposure in a country as dirty as India, even less
so with "stacking". India is not going to have some Kitchen Kops going
around villages and launching a pogrom on those who "stack". Nor is it the
case that the famous sandstorms of New Delhi and surroundings or the
infamous crop waste burning in the Punjab reaching New Delhi are going to
miraculously disappear (nor construction and traffic pollution in New Delhi
or brick kilns all around.)

Prof. Smith's bias against clean enough biomass stoves is obvious in this
2015 quote “It’s gas or electricity or both. Why are we pushing these
strange new gadgets that we never use here?
<http://www.powerlineblog.com/archives/2016/03/another-epic-greenfail.php>
This is the arrogance of the academic implementation scientists. It may
well be that gas and electricity can take over 50% of the household cooking
needs of the poor by simply "outsourcing" the most fuel-intensive and
water-intensive cooking (fried stuff, making of pasta or canned vegetables,
canned fish, canned sauces, canned ham) or "fast food" (ready meals that I
am sure Prof. Smith has seen on most rural roads; it was his picture of
induction stove by a highway tea-maker that inspired me to write "Electric
Chaiwalla" three years ago.)

Prof. Smith's charitable comments for "the very poorest" - whose food
rations are insecure, why worry about a hifalutin' stove - are cutely and
cruelly offensive. Just as a stove isn't going to save lives, a stove isn't
going to eliminate extreme poverty and destitution. This is - like Paul
Ehrlich in Delhi some 50 years earlier - a California professor professing
pity and proffering precisely nothing.

At least, unlike Ehrlich's preference for involuntary family planning,
Prof. Smith seems to advocate clean cooking as an answer to low
birthweight. (As if other cheaper and quicker means are not available. I
take exception rather self-righteously as someone with birthweight of 3.5
pounds and salvaged without any incubator. Of course my mother had cooked
on biomass all her life till then.)

Still, his last sentence is a remarkable innovation on his 2015 claim - "As
yet, no biomass stove in the world is clean enough to be truly health
protective in household use
<http://www.powerlineblog.com/archives/2016/03/another-epic-greenfail.php>."
I am pleased he has become less outlandish by adding "as a health measure",
and "if gas is available."

For the sake of record, let me note that household LPG subsidies did not
start as an explicit "health measure" (except that one doesn't need a PhD
in public health to know that smoke is unpleasant and unhealthy if in high
concentration for more than a few seconds). I do not know of any oil
company running a "health cross-subsidies" division, nor any ministry of
public health allocating its funds for LPG cooking. (There are exceptions
in some small-scale projects, both for "improved cookstoves" using biomass
as well as LPG. But no on-budget subsidies from health ministries; they
have more urgent priorities than fight PM2.5 and CO2 as Weapons of Mass
Destruction). ***

+++++++++++++
E.

Then, "What is the cost of these LPG programmes in India? This is not a
simple question."

*** But some simple answers are available. For one, the current Fiscal Year
budget allocated some $2.5 billion for just the direct, "on-budget" cash
transfer
<http://indianexpress.com/article/business/budget/union-budget-2017-subsidy-bill-up-over-3-per-cent-at-rs-2-4-lakh-crore-in-2017-18-4502370/>
to the eligible beneficiaries. That's for what the government pays into
bank accounts, whether or not the consumers need less or more than the
amount for one 14.2 kg cylinder per month roughly. If the supplier delivers
it.
The allocation seems to refer to about $2 subsidy per 14.2 kg cylinder. At
12 such cylinders a year per eligible connection, the subsidy per household
is roughly $24, or $0.15 per kg.

On top of it, there is the Ujjwala scheme (above) with a budget of $1.2
billion.

The government has just announced a gimmick - giving tax exemption
<http://www.businesstoday.in/current/economy-politics/tax-relief-by-gifting-lpg-connection-under-ujjawala-plus-scheme/story/260587.html>
to those who finance such a connection for others (around $25 per
customer). I imagine all poor relatives of someone rich enough to file a
tax return will now start bothering him/her.

Also, the government actively "encourages" companies - including those in
the public sector - to spend their "Corporate Social Responsibility" (CSR)
funds on expanding LPG connections to the poor. (In India, CSR is a
mandate, a tax in disguise which allows many companies to set up their
"foundations" just like the super-rich in the US).

So, via direct budget subsidies and "tax expenditures" - forgone tax
revenue - the Indian government has some $4 billion spend on what Prof.
Smith calls "globally powering initiative".

And he has some more of his own. To prevent "stacking" by consumers who
don't get timely refills, he and Ajay Pillarisetti proposed a "second
cylinder", one spare. That would add about $1.6 billion for the 100 million
or so current customers and another $1 billion for 30 million new
customers. (New enrollments now number a little over 20 million. Additional
30 million at $32 for two cylinders.)

How long would this go on with 50 million new customers? No telling.

Subsidy amounts for refills change month-to-month,  and so also the price
of LPG (which varies slightly by region).

In addition to "on-budget" subsidies there is an "off-budget" implicit
subsidy that is shown as "unrecovered losses" to the public sector oil
companies.

What Prof. Smith revels in calling "a multibillion dollar, zero-sum
internal 'foreign aid' programme over ten years from the well-to-do to the
poor" is nothing of the sort. Ever since 1979 if not before then, India's
public sector (and nationalized) oil companies have carried out this
internal aid program anyway on government orders; "on-budget" subsidies
only began two years ago and are rather unique among many countries that
control LPG prices of their national oil companies. (I happen to know oil
pricing shenanigans and corruption stories over the decades. Electricity
sector is equally bad; see the movie Katiyabaaz
<https://en.wikipedia.org/wiki/Katiyabaaz>.)

In any case, the *GoI has declared the on-budget subsidy would be reduced
by Rs 4 or about US 7c a month
<http://www.business-standard.com/article/current-affairs/how-withdrawal-of-lpg-subsidy-can-raise-india-s-healthcare-costs-117080300907_1.html>,*
(per 14.2 kg cylinder until it is entirely eliminated by the end of this
Fiscal (March 2018).

Many things move in India at the Indian Standard Time, which means
non-standard pace. Last month, the LPG price was increased by Rs. 7
<http://indianexpress.com/article/india/lpg-price-hiked-by-rs-7-per-cylinder-atf-by-4-4824025/>
or about US 11c per cylinder. This month (1 October 2017) price increase
was only about US 1.5 c per 14.2 kg.
<http://indiatoday.intoday.in/story/air-travels-jet-fuel-prices-hiked-6-per-cent-lpg/1/1059488.html>


The on-budget subsidy may well be eliminated, in order to meet the Central
Government budget deficit targets, but LPG prices may not be increased that
much.

Why, someone may ask. Isn't a removal of subsidy an increase in price? Not
quite. India is a Wonderland. Things aren't what they seem or are shown to
seem. GoI would just increase the "unrecovered loss" of public sector oil
distribution companies.

Why, the price of NON-SUBSIDIZED LPG is also controlled by the government,
making any economic comparison of subsidies rather fatuous.

The same day the price of subsidized LPG was increased by Rs. 7, that for
unsubsidized LPG (same cylinder size, 14.2 kg) was hiked by over ten times
as much, or Rs 73.50
<http://www.timesnownews.com/business-economy/article/lpg-price-hiked-by-rs-7350-in-delhi-new-rates-to-be-applicable-from-september-1/83134>,
a little over US $1.10. (At Rs 597.50 or US ~$9 even "unsubsidized" LPG is
much cheaper, at less than US $0.70 per kg, in India than most other places
for household customers.)

We are such players of the subsidy game and piling up public losses; far
bigger sums are involved in the electricity distribution business losses.

I will some day get around to finishing my estimates of the total subsidies
plus oil losses on household LPG fuel since April 2015.

What Prof. Smith does not mention is that household LPG subsidies come with
a quota, assigned or manufactured (with possible diversion). There are
complaints of "artificial scarcity" of LPG cylinders
<https://www.northeasttoday.in/indian-oil-corp-creating-artificial-scarcity-of-lpg-cylinders-shyam/>;
we in India know this game.

Oh, by the way, this government of India has reduced budgets for its health
ministry and for various social programs for children and mothers
<https://blogs.economictimes.indiatimes.com/et-commentary/a-union-ministers-thoughtless-remark-reveals-the-mindset-our-rulers-neednt-care-what-we-think/>.
And mid-day meal programs in schools and day-care centers for women working
outside do not get LPG subsidy. (Economic Times blog 19 September 2017).

Prof. Smith is celebrating an anti-poor government. Even as the government
claims to be "pro-poor:" In India, we have many layers of poverty, and many
subsidies. If Prof. Smith has his way, his "no stacking" stance only means
that instead of spreading LPG use to more households but with
less-than-complete switch from traditional fuels and stoves, he would
rather let the GoI maintain a "fuel apartheid", with a fifth of the
population neglected while the middle 50% get quick refills with double
cylinders.   ***

++++++++++++++
F. Last,

"LPG is a unique fossil fuel. No one looks or drills for it; nearly all of
it comes as a by-product these days from natural gas development. With
great expansion of natural gas from shale gas ("fracking"), there is
suddenly a surfeit of LPG globally; in three  years, the US has gone from
being a net importer to being the largest exporter in history. Thus, it
could be argued that LPG is found anyway and will be used somewhere no
matter what.. Why not utilize as much as possible for its highest social
value use - cooking for the poor?"

*** This is rather curious. Prof. Smith discovered "energy sector" with his
first epiphany "Cooks Like Gas", but could have asked around for
fact-checking.

It is not true that "nearly all" of LPG comes from natural gas development.
WLPGA says that 40% of the LPG supplies worldwide come from crude oil
refining. I don't know how much of the gas-linked LPG comes from new US
discoveries via "fracking", but I do know that NGL (natural gas liquids)
contribution to US "oil" supplies (consisting of crude plus NGLs) was about
23% average during the 1990s and grew to about 26% during the 2000s and
with the contribution of "fracking" oil as well as gas in the last ten
years, it has been 26-28% since.

What seems to have happened is that as US refining capacity declined, US
LPG from refining declined and US LPG market stagnated.  The new LPG thus
had to find markets offshore. The real "Globally Pioneering Initiative" in
the energy field is the "fracking" revolution in the US and elsewhere.
Since the markets for liquid fuels and liquefied gases are global in nature
- depending on routes and shipping costs - it is not just US that has
created an LPG surplus. There is LPG all around; India imports a million
tons a month and has contracted to import from Iran.
<http://economictimes.indiatimes.com/articleshow/58612089.cms>
++++++++++

I agree with Prof. Smith's enthusiasm for LPG; I wrote a draft policy note
back in 2005 or 2006 advocating acceleration of LPG (with pressure cookers,
for added efficiency) on "climate" and "health" co-benefits. With those oil
prices, though, it looked an implausible advice. Now I happen to believe
both "climate" and "health" benefits are red herrings and the projected
availabilities of LPG mean coastal cities around the world can absorb quite
a bit of LPG for all kinds of markets - households and commercial cooking,
power generation, passenger cars.

I have been critical of Prof. Smith here in part because I very much doubt
the cooking fuel switch alone will have any specific reductions in disease
prevalence, and in part because I do not like my ambitious but failing
prime minister, someone I regard as the Trump of India. Prof. Smith has
produced a piece of sycophancy, but then that is what the two editors of
the book expected.

Nikhil

PS: No offense intended.
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